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How much income tax do you save by investing the full ₹1.5 lakh under Section 80C?
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Calculate the exact tax savings from a full ₹1.5 lakh Section 80C investment under the old tax regime, across different income brackets.
Why 80C Matters Despite the New Regime
Section 80C lets you reduce taxable income by up to ₹1.5 lakh by investing in PPF, ELSS, EPF, life insurance premiums, tuition fees, principal repayment on home loans, and tax-saving FDs. The tax saved depends on your slab: ₹7,800 at 5% slab, ₹15,600 at 10%, ₹31,200 at 20%, and ₹46,800 at 30% — that’s the maximum benefit, available only if you claim the old tax regime.
The catch in FY 2025-26 is that the new regime now offers zero tax up to ₹12 lakh income with no deductions needed — making 80C irrelevant for that income range. 80C matters only if (a) you’re above ₹12 lakh taxable income, AND (b) your total deductions (80C + HRA + 80D + 80CCD(1B) + home loan interest) exceed roughly ₹3.5-4 lakh, AND (c) you actively choose the old regime.
For higher earners (₹20-30 LPA) with a home loan, HRA, and full 80C usage, the old regime can still beat the new regime by ₹50,000-1 lakh annually. Run both regimes side-by-side every year — your employer’s TDS structure can be adjusted before April based on your declared regime choice.